A familiar shopping and community space for many people in Iowa City will be under new ownership in the coming years after the Iowa Board of Regents approved the University of Iowa’s request to purchase the Old Capitol Mall.
Enter the first floor of the Old Capitol Mall, and visitors will see popular franchises like Noodles and Company and Raising Cane’s Chicken Fingers mixed with local businesses like T’Spoons Coffee and Treats and Bartertown Toys and Collectibles. Take the elevator one floor above, however, and patrons are now in the University Capitol Centre and the world of the UI.
The entirety of the mall will now be under the control of the UI within the next three years following the regents’ approval. The university currently owns 55 percent of the building, including the basement where UI Campus Safety is housed, and is set to obtain ownership of the rest of the mall beginning on Oct. 1, 2027.
David Kieft, UI senior director of university business and real estate business services, said at the regents’ meeting on Nov. 6 that the current 55 percent was purchased in three phases between 2006 and 2009. The purchase now comes at a time when maintaining the building is essential for the university, given its location in Iowa City and closeness to the UI.
“The question might be asked, ‘Why do this transaction?’” Kieft said. “We don’t immediately need the space. This is less about either the short or long-term need for the first-floor commercial space in the building, but more about the university acquirement, control, and significant footprint in the heart of our campus.”
Kieft said at the regents’ meeting that the mall was originally saved from going bankrupt in 2003 after multiple local investors got involved with the space.
Rod Lehnertz, UI senior vice president for finance and operations, said in an interview with The Daily Iowan that the university has had a longtime partnership with the private development firm that owns the mall and has the right to purchase the balance of the mall within that agreement.
The purchase price of $20.6 million will be paid with a 10 percent payment immediately, the remaining 90 percent being paid off over three years, and the final closing occurring on the Oct. 1, 2027 date.
With the mall located across from the Pentacrest and its prevalence for many UI students, Lehnertz said the university’s purchase of the remainder of the building will help incorporate it as a space for students to gather, similar to the Main Library or the Iowa Memorial Union.
“The building sits near the very core of our campus, but it is a large, enclosed building with an easy way through it for somebody who’s maybe not landing in that building but going past it,” Lehnertz said. “I think it’s a very popular stop-in, especially on cold weather days, and we’ll continue to refine its architecture over time to make it more welcoming, more usable for students, to feel like a student center.”
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Future project ideas for the mall include moving the UI Human Resources Department into the building and modernizing its entrances to look like university entrances. Current leases in the building will transfer over to university control following the purchase, and the UI plans to work with a management company to ensure the contracts are properly handled.
Lehnertz added that the UI also plans to keep all current businesses in the mall when it obtains ownership.
“We intend to maintain those retail spaces. They’re good for the students or the people that will use the building as a university facility, but also for those that are outside-facing on Clinton Street,” Lehnertz said. “They’re also a benefit to the downtown community, and so our intent is to maintain the retail spaces and the vendors in those retail spaces.”
For Jeremy Ziegenhorn, the owner of Bartertown Toys and Collectibles, the eventual transition is an opportunity for a positive change. Ziegenhorn opened the shop at the mall’s south end in 2021.
“[I’m] a little bit nervous. I don’t know what to expect, but I hear through the grapevine they’re going to keep the first floor retail, and hopefully, they will notice how awesome my store is and let me stay,” Ziegenhorn said. “Best case scenario, they say, ‘You’re so awesome, you can just stay here rent-free.’ Worst case scenario, might have to move, which would suck, but it’s okay because I need more space.”
In Ziegenhorn’s opinion, having local businesses in the mall is valuable. He hopes the transition includes the mall retaining its retail stores and restaurants throughout the first floor. With Bartertown specifically, he thinks the store offers a sense of nostalgia that is rare today.
“Everyone who comes through here just comments how cool it is, how it brings them back to their childhood. And you got students coming in, they enjoy it, and then also their parents, when they visit, they’re all about it, too,” Ziegenhorn said. “Kind of has something for everyone. And it’s kind of hard to find stores like this anymore.”
Though the purchase is still a few years away, Ziegenhorn also hopes the current financial agreements regarding leases will not change when ownership does.
“I hope they don’t raise the rent. I mean, that’s really the only thing I’m concerned about, you know,” Ziegenhorn said. “To me, it doesn’t really matter who owns it as long as it’s still affordable for someone like me running a small business, my other friends throughout the mall who own their own small businesses, and everything like that.”